Aman Singh and Sasidhar Sista have known each other since 2012 when they were part of the founding team of Ashoka University, the largest liberal arts and science university in India.
During their countless travels across India, Western Asia, and Southeast Asia, the duo noticed the information asymmetry of students pursuing their academic aspirations. It was about funding for graduate studies.
With limited advice, students avoid banks because they don’t know if their loan applications will be accepted. Meanwhile, banks lose on applicants and universities lose on enrollments.
Motivated by a vision to bridge the gap between education and finance, and bring students and banks together on one platform, Aman and Sasidhar started GradRight with a group of like-minded individuals, many of whom were friends and former colleagues.
GradRight recommends the most suitable loans offered by major banks and NBFC to a student based on their academic profile. Additionally, as lending institutions bid for applicants, students benefit from the lowest interest rates.
To benefit from the funding options, students must create a detailed profile of their future plans and requirements. GradRight then helps students evaluate loans offered by public / private banks and NBFCs and decide on the best options based on student profile. Once they have made their choice, they can complete all the formalities online and access the funds.
The portal makes the process of obtaining a loan transparent and allows students to obtain financing in just two days.
A national and global problem for “ middle class ” students and parents
the GradRight model was aware of the lack of networks and resources. âWith the exception of the richest 5%, most other students struggle to choose their best financing options,â says Aman Singh, co-founder, GradRight. âWhen they like college, they might not always take the course they want. Even if they take the course of their choice, it is not always at their preferred college. And if they get both, sometimes the program is too expensive and they can’t get the right funds because the college and the program are âunfinanceableâ for the banks. “
Inevitably, students are confused and move from advisor and bank to bank to find the right program and the necessary funds. Globally, the cost of education loans has skyrocketed.
In 2020, education debt in the United States was recorded as $ 1.71 trillion and exceeded the combined value of credit card and auto loans made during the period, while in the UK the figure was recorded as 140 billion USD in March 2020. In Canada, education debt grew rapidly, from $ 18.2 billion in 2017.
âAs India aims to increase its gross enrollment rate from 25% to 50% over the next decade, the country is seeing increased participation of private institutions that offer expensive degrees. A typical private undergraduate degree can cost anywhere from 15 lakh to Rs 40 lakh per year, âsays Sasidhar Sita, co-founder, GradRight.
âLikewise, an MBA can cost anywhere from 12 to 40 lakh. India’s outstanding education loans are estimated to increase by Rs 1.12 lakh crore at Rs 9 lakh crore in the next 10 to 15 years. For a country like ours, this is an important problem in the making. “
Get to the root of the problem with design research
With the generous support of Quicksand Design, a pioneering design research firm focused on social impact, the GradRight The team undertook a design research exercise to meet with hundreds of students, teachers, deans, bankers and donors who could sponsor higher education for disadvantaged students. The lessons of this exercise became the cornerstone of the development of GradRight.
âWe saw how these students still didn’t know how things would go and whether the banks would accept their loan applications. Students typically approached banks at the end of the process, after receiving admissions, and found themselves with limited time to negotiate the best rates. They never knew if the offer they received from a bank was the best, âsays Shivani Mani, Lead-People Partnerships, GradRight.
âBanks have lost applicants after going through the whole process of documentation, processing credits if the student received a better offer from another bank. On the other hand, universities have lost students after offering admissions because they could not get the funds on time. We realized that the answer lay in a platform that brought together students and banks, âsays Aayush Nagpal, Lead-Banking Partnerships, GradRight.
Birth of an Ed-FinTech company
With student-centered design research as an anchor, GradRight launched FundRight, where 12 national and international banks and NBFC transparently compete against each other to offer the best lending products. Banks and NBFCs choose students based on their own credit policies, student profile, and college choices.
FundRight is complemented by SelectRight, a financial data-driven college selection tool that helps students get a complete picture of the total cost, returns, payback period and âfundraising capacityâ of each program. . âThis saves a lot of time and effort for banks and students, as students now only contact banks after choosing and being selected for a ‘fundable’ program,â says Hasil, Lead -Growth, GradRight.
The platform was launched in November 2019 and had just started to gain traction when COVID-19 disrupted the world order. Students using the platform had to put their study plans on hold and many postponed it until 2021. âThe GradRight The team took voluntary cuts to their salaries and leveraged their limited resources to bolster the platform, forge new partnerships, and wait for the tide to change. The team got stronger as the situation improved, âsays Manonita, Lead-Talent Management, GradRight.
Since travel restrictions were relaxed in October 2020, the platform has grown rapidly in just a few months. Students from over 1000 cities are now using GradRight to apply for loans from the lender of their choice, whether the lenders are located in India or outside. With more than 5,000 registered candidates, GradRight saw the value of cumulative loan applications on its platform cross Rs 1,600 crore in a short period of time. âWe have continued to grow by 76% per month. Until April 2021, the platform facilitated loans of over Rs 150 crore â, says Lovish Rawal, Lead-Outreach, GradRight.
GradRight was recognized as the most innovative FinTech company in higher education finance in the FinTech Innovation Challenge by HSBC and the central government. He won the challenge of creating a transparent, student-centric ecosystem that tackles a global problem and improves global student mobility.
Democratize access to quality education
The team is inspired by the impact stories it brings to life every day. Students and their parents, who used GradRight, love it. Raghav Adlakha, who obtained admission to Harvard Kennedy School in 2020, says: âAnyone considering graduate student loans should seriously check GradRight. I came across a plethora of options from different banks and this led me to consider options that I wouldn’t have found otherwise! Their bidding platform helped students get cheaper loans and save students 2-23 lakhs over the loan cycle. “
Aastha (name changed), who attends a university ranked 150th by QS World University Rankings, said she almost gave up on her dream of studying abroad after losing her father and had to rely on her mother and her children. grandparents to support him.
Things started to improve when she posted her profile on GradRight. The platform used the strength of its academic profile to negotiate and obtain a loan from a private bank. This helped Aastha achieve her dream of pursuing a master’s degree in the United States.
Raj (name changed), a student from a remote town in Bihar, was struggling to finance his degree in sustainability. He had to travel between 60 and 70 km to reach the nearest shore. the GradRight the team stepped in and made sure he got a loan sanctioned by a large private bank, without even having to meet a bank executive in person.
A globally scalable solution
“GradRight is already the preferred sales and service partner of all of its collaborative banks and NBFCs. Banks attribute GradRight helping them reduce the cost of sales and pre-disbursement services by up to 75%. Its proprietary credit model is in the process of enhancing its services and positioning it as the primary driver of education loans for all of its partners. The platform is highly scalable and can be replicated in any country â. Sasidhar said.
The team has raised Rs 8 crore in a pre-Series A round of funding from a tight network of investors in the US and is ready for its next phase of growth. It has partnered with over 22 test preparation and consulting companies that give it access to over 1 million students planning to study abroad.
The team has grown from just 12 members to 45 in the past two months, and the number is expected to increase to 100 by the end of the year. âWe are preparing to launch the platform internationally to add value to students in countries where they are struggling to find the best loans,â says Ashirwad Singh, Lead-Technology, GradRight, while talking about GradRight’s future plans.
For this team, the journey to realize the educational dreams of students around the world has only just begun.